What is asset tokenisation and how does it work?
Asset tokenisation is the digital representation of an asset on a synchronised database (distributed ledger), or blockchain. It essentially means breaking up an asset into parts, each linked to the asset’s underlying value.
The ownership and value of these digital tokens are verifiable and can be traded reliably and securely. If there are rights or rules for the assets, these are coded into the digital token in the form of a ‘smart contract’.
Tokens also provide the ability to divide an asset into fractions, with multiple tokens each representing a share or percentage of that asset.
While tokenisation is new, the concept of fractional ownership is well established and is the same as trading shares in a company. However blockchain technology and tokens allows fractional ownership to be extended into limitless other types of assets, such as precious metals and property. Advantages include quicker and cheaper transactions and allowing investor access to more diverse asset classes.
Up until the emergence of blockchain and tokenisation, the structure and mechanics of capital markets has remained unchanged for decades. But like many industries, technology has now transformed how individuals and companies discover and leverage investment opportunities across a growing number of asset classes.
Examples of tokenisation - Leveraging new asset classes
As well as changing the way traditional financial assets are traded and valued, tokenisation opens the possibility of trading and leveraging previously illiquid and hard to trade assets.
A good example of this is the non-fungible token (NFT) in the digital art world which now has enormous global attention. Just this March, a collage by the digital artist Beeple sold for $69 million. Even the world’s most famous footballer Lionel Messi has launched an NFT. Being able to tokenise art this way democratises ownership and accessibility since they are stored on a blockchain. This means the assets cannot be altered by anyone and are highly re-sellable.
The Dacxi Advantage
Dacxi is a pioneer of digital assets and tokenisation. Dacxi’s proprietary technology and platform provides everyday investors with access to a carefully curated catalogue of investment opportunities, including select cryptocurrencies and bundles.
Dacxi’s catalogue also includes tokenised precious metals, one of the oldest asset classes in existence. Dacxi’s exchange provides individuals, SMSFs and companies unprecedented access to build a portfolio of precious metals.
Find out about our Precious Metals Bundle HERE